Has "In-Work" Benefit Reform Helped the Labour Market?

60 Pages Posted: 18 Oct 2001 Last revised: 8 Nov 2021

See all articles by Hilary Williamson Hoynes

Hilary Williamson Hoynes

University of California, Berkeley; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Richard W. Blundell

UCL; affiliation not provided to SSRN; IFS; IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Date Written: October 2001

Abstract

The aim of this paper is to examine the labour market impact of in-work benefit reform in the UK. Evidence is drawn from the impact of earlier reforms in the UK and similar reforms in the US. We focus on the impact on labour supply -- employment and hours of work. In the US a large proportion of the dramatic increase in participation among low educated single parents in the 1990s has been attributed to the increased generosity of the EITC. The impact of apparently similar reforms in the UK appears to have been smaller. We argue that these differences can be attributed to four factors: the impact of interactions with other means tested benefits in the UK; the importance of workless couples with children in the UK, who make up nearly 50% of the recipients in the UK; the level of income support given to non-working parents; and the strength of the economic upturn in the US during the 1990s.

Suggested Citation

Hoynes, Hilary Williamson and Blundell, Richard W. and Blundell, Richard W., Has "In-Work" Benefit Reform Helped the Labour Market? (October 2001). Available at SSRN: https://ssrn.com/abstract=287765

Hilary Williamson Hoynes (Contact Author)

University of California, Berkeley ( email )

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Berkeley, CA 94720
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National Bureau of Economic Research (NBER)

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IZA Institute of Labor Economics

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Richard W. Blundell

UCL ( email )

Department of Economics
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United Kingdom
+44 20 7504 5863 (Phone)
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HOME PAGE: http://www.ucl.ac.uk/~uctp39a/

affiliation not provided to SSRN

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IFS

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HOME PAGE: http://www.ifs.org.uk

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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